Power sector close to collapse under Rs513.37 billion debt

ISLAMABAD: Amid the unprecedented power shortages of over 7,000MW, Pakistan’s power sector receivables have risen to a whopping Rs513.368 billion in the first 10 months of the current financial year 2013-14, threatening collapse of the entire system.
According to the latest documents on receivables as of April 2014 available with The News, the provinces are required to pay Rs87.256 billion that include Sindh’s Rs54.547 billion, KP Rs20.540 billion, Punjab Rs6.619 billion, Balochistan Rs5.550 billion and the AJK’s Rs36.693 billion.

The shocking fact is that the government has failed to collect electricity bills from private sector consumers as this sector has emerged as the biggest defaulter owing a mammoth Rs345.386 to the Pakistan Electric Power Company (Pepco).

The document also unveils that the domestic sector in Fata is required to pay Rs32 billion, which has also been included in the head of private sector consumers.

Finance Minister Ishaq Dar said that the government was going to implement a special plan next week to improve the recovery of electricity bills as the finance ministry had no money to clear the circular debt that had risen to over Rs300 billion.

The prime minister is worried and annoyed over the appalling situation of power sector and it is clear that the Ministry of Water and Power is bound to speedily recover these bills and clear the circular debt. However, the finance ministry will also depute a senior official to help the Ministry of Water and Power to recover the dues.

Dar said that he was going to soon pay more to the Ministry of Water and Power from the head of inter-tariff differential subsidy so that PSO’s imminent default could be averted.

Meanwhile, the IPPs have reduced their power generation by over 1,600MW despite the fact that they have the capacity to generate 8,500MW of electricity. They have reduced their generation just because of non-availability of the required liquidity. They have no money to pay the interest to banks on loans they have borrowed to purchase the fuel. The government owes Rs210 billion to the IPPs and if the situation continues unabated, then the IPPs may halt their operations exposing the country to more loadshedding, according to Adbullah Yousaf, the Chairman of Advisory Council of the IPPs.

Meanwhile, the Pakistan State Oil is on the verge of being declared a defaulter as one of its letters of credit (L/C) is going to expire on Friday, June 13.The dues of PSO have also swelled to Rs130 billion as of today that the power sector has to pay to the state-run entity.

“We have supplied furnace oil of Rs160 billion to the power sector by June 9, 2014 in the current financial year and in return PSO miserably lacks the liquidity as the power sector is not paying for the fuel it has used so far,” a senior official in PSO told The News.“This situation has exposed PSO with zero liquidity because of which it has no fiscal space to place more orders to import furnace oil for power generation.”

Incentives for agriculture sector

ISLAMABAD: The government has announced some incentives for the agriculture sector in order to boost its productivity and jack up the country’s economy and exports, as it is contributing more than one-fifth to its GDP and employs 45 percent of the labour force.

Sales tax on tractors has been reduced from 16 percent to 10 percent. “To promote the agriculture sector, we are proposing concessions for encouraging tunnel farming by removing customs duty on import of plastic coverings and mulch film, anti-insect net and shade net. Sales tax on high irrigation equipment and equipment for green house farming is also proposed to be exempted,” the federal finance minister Ishaq Dar while announcing the federal budget 2014-15 in the lower house said.

In Makran Division, Gilgit-Baltistan, Swat district and Fata regions, agriculture produce suffers great losses for lack of processing and transport facilities. The government will introduce a policy to support processing projects in these areas. These units will enjoy duty and tax-free import of machinery not locally manufactured and will also have access to SBP LTF facility and five-year tax holiday. Additionally, a concessionary long-term financing facility shall be provided to them through the State Bank of Pakistan.

The government has also decided to provide 50 percent airfreight subsidy for the horticulture produce from Gilgit-Baltistan.

The government has also announced to provide Rs500 billion credit to farmers during 2014-15. “During one year, our government has increased credit availability to agriculture sector from a targeted Rs315 billion to Rs380 billion. Credit to agriculture is critical for enhancing farmers’ productivity. We are conscious of the difficulties faced by the farmers in getting credit through the loan sharks,” the minister said.

He announced that the government would introduce Rs30 billion ‘Credit Guarantee Scheme’ loaning small farmers a micro credit of up to 100,000 rupees. Through the State Bank of Pakistan, the government will provide guarantee to commercial, specialised and micro finance banks for up to 50 percent loss sharing. The scheme will cover farmers having up to 5 acres irrigated and 10 acres non-irrigated land holdings that will benefit 0.3 million farmer households/families.

Another 2.5 billion rupees ‘Reimbursement of Crop Loan Insurance Scheme (CLIS) Premium’ will be initiated to insure farmers with landholding of 12.5 acres against natural calamities, climatic changes and plant diseases and crop risks. From this budget, the scope of CLIS premium reimbursement is being enhanced up to 25 acres. All farmers obtaining loans for production of 5 major crops are eligible to benefit from this scheme. Overall, 700,000 farmers households/families will benefit from this scheme.

Livestock Insurance Scheme is another venture of the government to mitigate the risk of losses of small livestock under which farmers can get financing for up to 10 cattle heads. The scheme will cover livestock insurance in case of calamity and disease. The scheme will benefit 100,000 livestock farmer households/families. An allocation of Rs300 million has been made in the current budget for the scheme.

In order to develop a mechanism for establishment of quality warehouses, silos, cold storages and cold chains, and linking it to finance through warehouse receipt system, the government, through the SBP’s help, will develop a regulatory mechanism for establishment of a warehousing clearing system and introducing special incentives for potential investors.

This scheme will cover all existing or new warehouses, silos and cold storage for farmers, aggregators, traders and other value chain players. Under the scheme, Rs1 billion will be invested as GOP-equity for establishment of a PPP-company to regulate and monitor this system. Additionally, the State Bank has decided to provide the LTF facility for the establishment of storage and cold-chain facilities.

The government has allocated Rs1071.300 million for 19 projects of the National Food Security and Research division for fiscal year 2014-2015 under Public Sector Development Programme (PSDP). Of this, Rs740 million have been allocated for 10 ongoing schemes while Rs331.135 million will be spent on nine new schemes.

Tribute to Gayari sector martyrs

KARACHI: Two years ago, over 100 brave soldiers embraced martyrdom when an avalanche hit the military headquarters in the Gayari sector in the treacherous Siachen region.

The pride of Pakistan, the Sixth Northern Light Infantry Regiment (NLI) was on duty at the world’s highest battle ground, operating in temperatures as low as -60 C (-76 F) battling vicious winds and altitude sickness — the region is just east of the world’s second-highest peak, K-2. At such altitudes, climate has killed far more than gunfire. Casualty figures are not released, but hundreds are believed to have died there.

A battalion headquarter size Pakistani-post which had been operational in Siachen for the last two decades was lost under an avalanche 80 feet deep and almost 1 kilometer across on each side.

The avalanche buried 129 soldiers and 11 civilians under thick snow. The Pakistan Army immediately began a rescue and search operation. Using heavy machinery and round the clock operations the Army recovered 133 bodies.

The nation remembers their martyrs today and continues to pray for them.

Google commits $1mn to bring more women into technology sector

Google is challenging to increase the representation of women in their respective tech communities (AP photo)

Search engine giant Google has committed USD one million (over Rs 6 crore) to 40 startup-focused organisations, including Nasscom 10,000 Startups and Jagriti Yatra from India, to promote participation of women in the technology space.
The efforts, a part of ‘#40 Forward’ programme under Google for Entrepreneurs’, are aimed at finding new ways to advance female entrepreneurs, the Internet giant said ahead of International Women’s Day.
Google is committing USD 1 million in aggregate to 40 startup-focused organisations, challenging them to increase the representation of women in their respective tech communities, it added.
“From simply changing the times of events to accommodate busy moms to teaching young girls to see themselves as entrepreneurs, 40 of our partner communities will soon launch new programmes and outreach initiatives to encourage women founders,” it said.
Some of the selected organisations include 1871, American Underground and Galvanise (US), Campus for Moms (Israel), Club Kidrepreneur (Australia), Cc Hub (Nigeria), Jagriti Yatra and Nasscom 10,000 Startups (India) and Outbox (Uganda), among others.
“Along with our 40 partners, we hope to create more inclusive networks and to move the needle for entrepreneurs like my mom and young women like me who aspire to be like her,” Google Global Entrepreneurship Manager Bridgette Sexton Beam said in a Google Blogpost.
According to the National Association of Women Business Owners, women make up 30 per cent of US business owners and employ nearly 7.8 million workers.
Even though women-owned enterprises operate with far less capital, in the venture-backed tech industry, they produce 12 per cent higher returns.
“That means that not only is supporting women in business the right thing to do, it’s also the smart thing to do,” Beam said.

Bosan for enhanced Pak-Australia cooperation to strengthen Agri sector

MULTAN: Federal Minister for National Food Security and Research Sikandar Bosan Friday lauded Australian help in tackling mango diseases for enhanced production of the exotic fruit and added that their pre-harvest guidelines tripled the income of mango growers in targeted areas of Sindh and Punjab.
Talking to reporters at the circuit house, he said that Pakistan and Australia should move ahead for a national level project in the country to expand the benefits to all the provinces in line with efforts aimed at strengthening the agriculture sector.
Bosan was accompanied by a delegation of Australian agriculture scientists led by Ian Bally currently paying a visit to South Punjab and Sindh agriculture areas to explore the need and possibilities for further extension in the on-going Australia-Pakistan Agriculture Sector Linkage Programme (ASLP) for research on mango diseases including Sudden Death and mango malformation besides mango post-harvest handling.
The Minister said that ASLP Mango project has established 24 integrated research sites in Punjab and 12 in Sindh where pre-harvest mango orchard management technology has increased the income of growers from Rs 0.1 million to Rs 0.3 million.
He said that Sudden Death disease can not go away permanently, however, the technology and guidelines conveyed by the Australian experts helped mango growers in a big way.
The delegation head Ian Bally told reporters that growers can increase their production two to three times and improve its quality by following the mango farm management guidelines against sudden death disease. Our research on mango malformation disease was still in progress, he added. He advised growers to perform pruning in their orchards to enable sunlight and air reach plants for proper growth and fruit formation.
The Australian scientist said that Australia will also provide help to Pakistan on post-harvest technology and guidelines for enhanced mango export. Most of Pakistani mango production is wasted between harvest and consumer stage, Ian Bally said.
The Minister said that ASLP Mango project developed three nurseries at Mango Research Station Shujabad, Sindh Horticulture Research Institute Mirpur Khas and Sindh Agriculture University Tando Jam besides three nursery shades. Two commercial nurseries at Sadiqabad and Vehari were operational, he said adding that the Sadiqabad nursery had reared 30,000 mango plants and grafted 8000 which have been sold to orchard owners.
The ASLP project also assisted 17 masters level students and two Ph.D students for their degree research.
Minister said that four research papers were published in the national and international journals while six research abstracts were presented in 2013 and eight abstracts submitted for the conference to be held in 2014.

Ireland eyes new big player to boost banking sector

DUBLIN: Ireland would like a "significant" new bank with a big balance sheet to enter its lending market this year to drive competition in the diminished sector, finance minister Michael Noonan said on Saturday.

Ireland's banking crisis, which helped push the country into an European Union-International Monetary Fund bailout that it completed last year, led to the closure or merger of half of the country's domestic banks and the exit of a slew of foreign lenders.

It has also left the country with only three SME lenders of scale, state-owned Allied Irish Banks, Royal Bank of Scotland's Ulster Bank and Bank of Ireland, which counts the Irish state as a 14 percent shareholder. "We are talking about a bank with a big balance sheet.

A third significant player," Noonan told reporters at his Fine Gael party's annual conference after he said in a speech that he would like to see a third viable bank in the country.

"I'm exploring it. I know there are people interested. In the course of this year, it would be nice to get these things done before banking union," he said, referring to the European Union's plan for a more integrated banking system.

Noonan added that he absolutely wanted mortgage lender permanent tsb (ptsb), currently the third domestic-owned bank in the country behind Bank of Ireland and AIB, to remain part of the banking sector.

Noonan's comments come after Flip, a proposed European bank, kicked off formal fundraising to raise 100 million euros to allow them cash in on Ireland's newly-concentrated banking market and slowly recovering economy.

However Noonan said he was looking for a much bigger lender than Flip and ptsb to enter the market and that he was sending a signal out that there is a space to do so.

"They were talking about 100 million (euros), 100 million wouldn't capitalise a bank," Noonan said, referring to the Flip proposal. "The amount of money they were talking about was far too small."

"There's a general agreement to the principle that the two pillar banks, Bank or Ireland and AIB, are insufficient as players in the market to give the kind of competition that a growing economy might need."